asked the Minister for the Enviroment if he is satisfied that the recent reduction in building society rates is sufficient in view of the general downward movement of interest rates; and whether he will now seek a further reduction in mortgage interest charges from the building societies.
Ceisteanna—Questions. Oral Answers. - Building Society Rates.
3.
I am always anxious that, in the interests of house purchasers, the housing programme and the construction industry, the building society mortgage rate is kept as low as possible. The present rate of 9.75 per cent is the lowest which has applied since 1978 and is 3.25 per cent lower than it was between March and June this year. The mortgage rate charged by societies is dictated by the interest rate paid to investors. It seems that, if the rate of inflow of funds is taken as the criterion, there is not scope at present for a further reduction in the rate paid by the societies to their investors.
I put it to the Minister that interest rates have come down since January of this year from 17¼ per cent to 14¼ per cent, a fall of 3 per cent, but in the same period mortgage rates have come down by 2 per cent. Therefore, there is scope today to reduce the mortage rate by 1 per cent. Will the Minister meet the building societies and arrange for that 1 per cent cut in interest rates, a move which would save many householder £30 or £40 per month?
The present rate at 9.5 per cent is the lowest since 1978 and is 3.25 per cent lower than it was between March and June of this year.
Although it is not the function of the Chair to adjudicate on the quality of the answers I must point out that the Minister has not answered the question I asked. I asked him if he was aware that interest rates have fallen by 3 per cent since January while mortgage rates have fallen by 2 per cent with the result that there is scope today for a 1 per cent fall in mortgage rates. Will the Minister meet the building societies and arrange that?
I have told the Deputy that mortgage rates have dropped by 3.25 per cent between March and June this year. I prefer to stand by my figures.